Bahrain has been forced to cancel next month's Formula One grand prix as anti-government street protests continue.

Crown Prince Salman bin Hamad Al Khalifa - the owner of the F1 contract - said that the kingdom must "focus on immediate issues of national interest and leave the hosting of Bahrain's Formula One race to a later date".

The race, due to have been on March 13, is the kingdom's biggest international event and has been held annually since 2004.

The week-long unrest has already affected Bahrain's economy as international rating agency Standard & Poor's has cut the government's credit ratings because of concerns about political turmoil

Meanwhile, a group of young protesters camped out in a central square of the capital called for the removal of the entire ruling monarchy as part of sweeping demands to call off the uprising.

The call stakes out the most uncompromising demands of protesters to date, most of whom have only demanded the weakening of the monarchy.

Tensions are still high after battles that saw riot police open fire on protesters trying to reclaim landmark Pearl Square last week. At least eight people have been killed and hundreds injured in the continued clashes.

Hundreds of protesters spent the night at the square, and thousands of government opponents had gathered at the site by Monday afternoon. The mood was upbeat and many appear to be camped there for the long haul, with makeshift kitchens serving meals to those who live in the small tent village.

Bahrain's rulers have offered talks with opposition groups to try to defuse the showdown, but the opposition appears to be in no hurry to talk with the crown prince who has been delegated by the king to lead the dialogue.